figures in chapter 1. learning objectives after studying this chapter, you should be able to; define...
TRANSCRIPT
Figures in Chapter 1
Learning objectives
After studying this chapter, you should be able to;
• Define logistics and supply chain management.• Describe logistics as a system consisting of sub-
systems.• Outline the main types of goals and performances of
logistics and supply chain management.• Explain the interaction between different goals and
performances of logistics and supply chain management.• Explain how logistics can contribute to competitive
advantages.
Figure 1.1
Material supply DistributionProduction
Suppliersystem
Customersystem
Coordination Coordination
Rawmaterial
stock
Finishedgoodsstock
WorkIn
Progress
Ware-house
BufferInternaltransport
Externaltransport
Externaltransport
Control Control Control
Logistics system
Material flow Stock Operation
Coordination Coordination
Movement
Figure 1.2
M DPM DPM DP
Logistics system
Supplier Company Customer
Figure 1.3
Customer service Costs Tied up capital Environment
Flexibility Time
Figure 1.4
Return on capitalemployed
10% · 1 = 10%
Costs50 M€
Turnover (revenue)55.6 M€
Turnover (revenue)55.6 M€
Profit5.6 M€
Profit margin5.6/55.6 = 10%
Working capitalturnover rate1 time/year
Finished goods stock
Work in process andtransportation
Raw material stock
Total assets55.6 M€
Turnover (revenue)55.6 M€
Other current assets
Fixed assets
(-)
(/)
(/)
(x)
(+)
Figure 1.5
Wor
king
cap
italt
urn
ove
rra
te(t
ime
spe
r ye
ar)
Profit margin (%)
5% 10% 15%
0,5
1,0
1,5
2,0
ROCE 5 %
ROCE 20 %
ROCE 10 %
Figure 1.6
Engineering Production Purchasing Quality FinanceSales
Marketing
CustomerProduct
Functional organisation:
Flow / Process organisation:
Engineering Production Purchasing Quality FinanceSales
Marketing
Figure 1.7
Differentating role of logistics
Cos
t-le
ader
ship
role
of lo
gist
ics Cost-leadership
logistics
Cost-leadership andDiffereniated
logistics
Differentiated logistics
Low High
Low
High
Figures in Chapter 2
Learning objectives
After studying this chapter, you should be able to;
• Describe the major process and activity types of the logistics system.
• Describe the major functions of the logistics system.• Describe the major flow types of the logistics system.• Describe the major types of players in the logistics
system.• Describe logistics and supply chain management from
different perspectives.• Outline the major phases of the historical growth of
logistics and supply chain management.• Explain how logistics and supply chain management is
related to different disciplines.
Figure 2.1
Supply Manufacturing Distribution
- Supplier selection- Generation of purchasing order- Releasing purchasing order- Goods tracking- Goods reception - Materials handling- Invoice control
- Capacity planning- Materials planning- Materials handling- Production- Stock keeping
- Transport planning- Transport- Loading and off-loading- Stock keeping- Product configuring and installation (manufacturing)
After sales
- Order management- Transport planning- Loading and off-loading- Goods reception- Transport- Materials handling- Transport
Core processes:
Example of activities:
Orderto
delivery
- Customer order reception- Order management- Order acceptance- Materials handling- Packing and loading- Transport- Invoicing
Return
- Identify product condition- Disposition product- Transport planning- Loading and off-loading- Transport- Goods reception - Invoice crediting
Figure 2.2
Source Make Deliver
Return Return
Plan
Own companySupplier(internal or external)
Customer(internal or external)
Supplier’ssupplier
Customer’scustomer
Source Make Deliver
Return Return
Plan
Source Make Deliver
Return Return
Plan
Deliver
Return
Deliver
Return
Figure 2.3
Source stockedproducts
Source make-to-orderproducts
Source engineer-to-order products
Source
Make-to-stock
Make-to-order
Engineer-to-order
MakeDeliver stocked
products
Deliver made-to-order-products
Deliver engineered-to-order products
Deliver
Deliver retailproducts
Deliver return
Return defective productsReturn MRO productsReturn excess products
Source return
Return defective productsReturn MRO productsReturn excess products
Plan source Plan make Plan deliver
Plan
Plan return
Plan supply chain
Supplier Customer
Figure 2.4
Supply ChainBusinessProcess
Supply ChainManagementComponents
Supply ChainNetwork
Structures
1. Who are the key suppychain members wuth whomto link processes?
2. What processes should belinked with each of these keysupply chain members?
3. What level of integrationand management should beapplied for eaxh process link?
Figure 2.5
Material flow
Information flow
Monetary flow
CustomerSupplier
Focal company
Figure 2.5
No Activity descriptionActivity
type
1
2
3
4
5
Time Cost
Figure 2.6
Depart-ment A
Depart-ment B
Depart-ment C
Depart-ment D
Depart-ment E
Activity 1
Activity 2 Activity 3 Activity 4
Activity 5
Activity 6 Activity 7
Activity 8
Figure 2.8
Society
Goodsmover
Goodsowner
Customer
Logisticssystemet
Society
Goodsmover
Goodsowner
Customer
Logisticssystemet
Figure 2.9
Long-term decisions
Short-term decisions
Strategic perspective
Tactical perspective
Operative perspective
Figure 2.10
Supplier CustomerProduction Distri-bution
Company
Materialsupply
Figure 2.11
Supplier CustomerProduction Distri-bution
Company
Materialsupply
Figure 2.12
Own company
3rd tiersupplier
2nd tiersupplier
1st tiersupplier
Productmanufacturer
1st tier customer(Wholesaler)
2nd tier customer(Retailer)
Endcustomer
Up-stream supply chain Down-stream demand chain
Figure 2.13
Focus
Phase 1: Transport and warehouse optimisation
Phase 2: Material administration
Phase 3: Logistics strategy
Phase 4: Supply Chain Management
- External transport- Inventory control- Total cost analysis
- Integrated logistics processes- Customer service- Marketing
-Logistics strategy and management -Reverse logistics andthe environment- Information system
- Network strategies- Relationship management- International logistics- IS/IT for logistics- Global planning
Logistics time phase
Figur 2.14
Organisational theory
- Work organisation- Inter-organisational relations
- Business strategy
Logistics
Engineering
- Transport technology- Production technology
- Materials handling technology- Packaging technology- Information technology
Marketing
- Distribution channels- Industrial network theory
Operations research
- Mathematical modelling
Other business disciplines
- Management accounting- Business law
Figures in Chapter 3
Learning objectivesAfter studying this chapter, you should be able to;
• Explain how storage, materials handling, freight transportation and packaging systems together carry out the flow of materials in a supply chain.
• Describe what to consider when designing a store layout.• Describe the principle of dividing a store into zones. • Explain the pros and cons of fixed and random storage location
systems. • Describe and compare the major types of equipment used for
physical storage of items in a warehouse.• Describe and compare the major types of material handling
equipment. • Describe and compare the principles of different strategies for
retrieval of materials from stores.• Describe and compare the characteristics of the major traffic modes.• Explain the roles of different major players in the transport system.• Explain the roles and functions of packages in the logistics system.
Figure 3.1
TransportStock Work in
processTransport Transport
Componentstore
Finishedgoodsstock
Finished goodsstockSupplier Customer
Material supply system Production system Distribution system
Work inprocess
Material handling Material handling
Stock point Operation Transport
Figure 3.2
Goods reception
Outbound loading
Stock area Stock area
Outbound loading Goods reception
Stock area
Stock areaStock area
Sorting and assembly area
a) Linear layout b) U-shaped layout
Sorting and assembly area
Figure 3.3
Stockingzone A
Stockingzone C
Stockingzone B
Goods reception and outbound loading
Sortingzone
Figure 3.4
Free stacking
Depth stacking
Free stacking
Depth stacking
Figure 3.5
Figure 3.6
Figure 3.7
Figure 3.8
Figure 3.9
Lift truck, low loaders and stackers Low and high picking trucks
Counterbalance truck
Figure 3.10
Chain-linked ceiling andfloor-based conveyors
Roler tracks in productionRoler tracks in high warehouse
Figure 3.11
AGVS
Figure 3.12
Pickingorder
Pickingorder
Packing
Packing
Pickingorder
SortingPacking
Delivery
Delivery Delivery
a) Picking of several orders b) Picking of individual orders c) Picking of part-orders
ZoneA
ZoneB
ZoneC
Needper article
SortingPacking
Delivery
d) Picking of articles
Figure 3.13
Tied up capital
Transport cost
Load quantities
Delivery service
Large Small
Low High
High Low
Low High
Sea Railroad Road Air
Figure 3.14
a) Tractor and semi-trailer:Max length: 16.5 m Width: 2.55-2.6 mm Total weight: 40-44 ton Load volume: 33 EUR pallets
b) Truck + trailer: Max length: 18.75 m Width: 2.55-2.6 mTotal weight: 40-44 tonLoad volume: 33 EUR pallets
Figure 3.15
Distribution truck:
Max length: 12 mTotal weight: 12-26 tonLoad volume: 18-24 EUR pallets
Figure 3.16
Figures in Chapter 4
Learning objectives
After studying this chapter, you should be able to;
• Define customer service and explain its role in logistics and supply chain management.
• Explain how to develop customer service during different time phases.
• Define and describe the major delivery service elements.• Explain how exchange of information and logistics
services can contribute to customer service.• Describe the process of determining total customer
service commitments and establishing a customer service strategy.
• Explain the role of ABC analysis when establishing a customer service strategy.
Figure 4.1
Tid
Goods
Services
Time
Product
Figure 4.2
Customer satisfaction
Verysatisfied
Verydissatisfied
Degree ofachievement
Did not doat all
Fullyachieved
Excitingexperiences
Expectedneeds
Basicneeds
Figure 4.3
Customer service
Pre-orderservice
Service from orderto delivery
Service during delivery Post-delivery service
Figure 4.4
Delivery service Information exchange Logistics services
Customer service
Figure 4.5
Cost
Customer service100 %
Cost
Customer service100 %
Figure 4.6
Revenue
Customer service
Figure 4.7
Revenue
Customer service
CostCost and revenue
MaximumProfit contribution
Figure 4.8
Low High
High
Low
Over-performance
Under-performance
Significance of servicedimension to customer
Cu
sto
me
r’sp
erce
ptio
n of
se
rvic
e p
erfo
rmed
Figure 4.9
100 %
100 %Andel av produkterna (%)
Andel av vinsten (%)
100 %
100 %Andel av alla kunderna (%)
100 %
100 %Andel av alla kunderna (%)
Andel av vinten (%)Share of total profit contribution (%)
Share of total profit contribution (%)
Share of all customers (%) Share of total products (%)
Figur 4.10
A B C
A
B
C
Customers
Pro
du
cts
Figures in Chapter 5
Learning objectives
After studying this chapter, you should be able to;
• Define and describe the major types of logistics costs.• Define and describe different measures of tied-up
capital.• Describe methods for mapping material flows in supply
chains.• Describe methods for mapping tied-up capital in supply
chains.• Explain how to and be able to map and analyse tied-up
capital in supply chains. • Explain how to and be able to carry out a total logistics
cost analysis.
Figure 5.1
Customer serviceEnviornmentalconsequences
Transportation and handling costs
Shortage and delaycosts
Capacity relatedcosts
Inventory carryingcosts
Ordering costsAdministrative costs
Packaging costs
Logistics costs
Figure 5.2
Cycle stock Time Transport Time
Stock level Stock level
Average stock Average
stock
Cycle stock Time Transport Time
Stock level Stock level
Average stock Average
stock
Figure 5.3
Operation, refinement
Transport, movement
Storing
Control
Waiting or other time delay
Figure 5.4
Manufacture of tubulators
Flussing
Assemblyof coolers
Assemblyof connectors
Buffer stockSoldering
Press-ing
Assembly of consoles
Varnishing
Rawmaterialstock
Finishedgoodsstock
Figure 5.5
Machining
Cutting
WeldingAssemblying
Finalassemblying
Sheet ironstock
Stock of sheetcomponents
Semi-finishedstock
Finished goodsstock
Iron barstock
Stock of cut components
Stock ofbought components
Spare partstock
120”
16”
40”
18,8”
35”
17”
28” 37”
25”
5”
11”
8” 16”
6” 19”
58”
3,8”7,9”
4,3”
6,5” 6,1” 12,2”
5,3”
1,8” 4,7” 8,7”
1,7”
Figure 5.6
Tied-up capital (Euro/day)
days
Idle time L1 Idle timeP1
Idle time L2Pur
chas
e va
lue/
idle
tim
e L1
Incr
ease
d tie
d-up
-ca
pita
lper
da
yat
P1
Tied-up capital (Euro/day)
days
Idle time L1 Idle timeP1
Idle time L2Pur
chas
e va
lue/
idle
tim
e L1
Incr
ease
d tie
d-up
-ca
pita
lper
da
yat
P1
Figure 5.7
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Weeks
Tied-up capital (Euro/week)
75 000
30 000
60 000
1 2 3 4 5
Figures in Chapter 6
Learning objectives
After studying this chapter, you should be able to;
• Describe different aspects of environmentally adapted logistics.
• Describe different types of environmental threats of freight transport.
• Explain how various environmental regulations affect the environmental impact of logistics.
• Explain how filtering, re-using, recycling and reducing strategies can be used as environmental measures in different parts of the logistics system.
• Describe the content of an environmental management system.
• Describe the content and characteristics of environmental impact assessment.
No figures in the chapter
Learning objectives
After studying this chapter, you should be able to;
• Explain the roles of products, product groups and product ranges in logistics and supply chain management.
• Explain how the form and complexity of product structures impact logistics and supply chain management.
• Explain the relationship between the customer order decoupling point and various product categories.
• Describe and compare the characteristics of engineer to order, make to order, assembly to order, make to plan and make to stock companies.
• Describe and compare strategies for dealing with product variants.
• Explain how to focus of the logistics strategy in different phases of the product lifecycle.
Figure 7.1
Product A Product B Product DProduct C Product E Product A
Product A Product B Product C Product A
Case 1:
Case 2:
Figure 7.2
Product P
A B C D E F
G H I J
K L
Figure 7.3
PC Customer
CODP
Make-to-stock(forecasted)
Make-to-order
Figure 7.4
Make to stock
Make to plan
Engineer to order Make to order
Assembly to order
Figure 7.5
Raw materialsand purchasedcomponents
Productvariants
Product variantswith accessories
Raw materialsand purchasedcomponents
Figure 7.6
Possibleproductvariants
Module variants
Product variantsbased on modules
Raw materialsand purchasedcomponents
Raw materialsand purchasedcomponents
Figure 7.7
Salesvolume
Time
Introduction phaseGrowth phase
Maturity/saturation phase Decline phase
Figures in Chapter 8
Learning objectivesAfter studying this chapter, you should be able to;
• Explain the differences and similarities between single, multiple and hybrid sourcing strategies.
• Define and describe the characteristics of approved, system and component suppliers.
• Explain the consequences of working with a large supplier base and outline methods for supplier base reduction.
• Explain the supply chain impact of distances between a company and its suppliers.
• Outline and describe the characteristics of major types of delivery patterns from a supplier to a customer company.
• Outline and describe major types and characteristics of relationships between a company and its suppliers.
• Explain the consequences of various types of relationships between a company and its suppliers.
• Explain how to conduct supplier segmentation and select supplier relationship levels.
Figure 8.1
Item13976
Supplier 1
Supplier 2
Supplier 3
Supplier 1
Item13976
Supplier 2
Supplier 3
Multiple sourcingSingle sourcing
Figure 8.2
Number of parallelsuppliers
Product specificity
Singlesourcing
Dualsourcing
Multiplesourcing
1
2
3
4
Low High
Figure 8.3
Item60442
Supplier 1
Supplier 2
Supplier 3
Item28947
Item14673
Supplier 1Item
60442
Item28947
Item14673
Items with similarcharacteristics
Figure 8.4
Supplier 2
Supplier 1
Item60442
Item 28947
Item 14673
Supplier 1Item
60442
Item 28947
Item14673
Items with similarcharacteristics
Items with similarcharacteristics
Figure 8.5
Product company Product company
Systemsupplier
Systemsupplier
Systemsupplier
System supplier strategy Component supplier strategy
Component suppliers Component suppliers
Figure 8.6
Traditional supply to stock (1)
Direct delivery to production (2)
Delivery through logistics centre (3)
Vendor managed inventory (4)
Direct delivery to customer’s customer (6)
In plant store (5)
Supplier Customer
Figure 8.7
Technical
Information technological
CustomerSupplier
Time-related
Knowledge-based
Social
Legal
Financial
Market-related
Figure 8.8
Conventional suppliers
Associated suppliers
Partnershipsuppliers
Figur 8.9
Leverage items
Coordinate processes
Non-critical items
Efficient routines
Bottleneck items
Secure delivery
Strategic items
Long-term cooperation
Availability on the marketHigh Low
Sig
nific
ance
for
the
com
pan
yLo
wH
igh
Figure 8.10
Just-in-time orientedprocurement
Order by order procurementwith simplified routines.
Order by order procurementwith complicated routines.
Order by order procurementwith simplified routines.
Repetitively used suppliers
Degree of customer order specificityStandard Order specific
Pro
cure
men
tfr
equ
ency
One
-off
Hig
h
Figures in Chapter 9
Learning objectives
After studying this chapter, you should be able to;
• Describe different types of transformation conducted in the production process.
• Describe the characteristics of various material flow structures in production.
• Describe and compare the characteristics of major types of production layouts.
• Describe considerations and strategies for determining the capacity required in a production system.
• Describe and compare strategies for adaptation of production capacity.
Figure 9.1
V type A type
T type I type X type
V type A type
T type I type X type
Figure 9.2
La
La
La
Mi
Mi
Mi
Gr
Gr
Gr
Dr
Dr
Dr
La
La
La
Mi
Mi
Mi
Gr
Gr
Gr
Dr
Dr
Dr
Figure 9.3
La MiDr
LaMi Gr Gr
Figure 9.4
La MiGr
Dr
La MiLa
Mi Gr
DrDr
Figure 9.5
Fixed-positionlayout
Functionallayout
Cellular layout
Line-shapedlayout
Low Volume High
Low
Va
riety
Hig
h
Figure 9.6
Plann-ingDep.
Plann-ingDep.LaLa
LaLa
La
Dr
DrDr
DrDr
Mi
Mi
MiMi
Functional production layout
Line-shapedproduction layout
Figure 9.7
20 40 60 80 100
Throughput time
Capacity utilisationin %
n = 1
n = 2
n = 3
G3
G2
G1
Figure 9.8
Production dep 1Capacity: 260 of
A, B or C
Product ADemand: 60
Product BDemand: 80
Product CDemand: 120
Production dep 4Capacity: 120 C
Production dep 2Capacity: 60 A
Production dep 3Capacity: 80 B
Raw material
Figure 9.9
Capacity level
Delivery timeActual
deliverytime
Actualcapacity
level
1
2
Figure 9.10
Volume Volume
Time Time
Demand Capacity
Lead strategy Lag strategy
Figures in Chapter 10
Learning objectivesAfter studying this chapter, you should be able to;
• Describe what utility values distribution contributes to in a supply chain.• Describe what roles distribution companies can play in a supply chain.• Explain how intermediary companies can bridge the gaps between
companies that produce products and customers that consume products.• Describe commonly occurring distribution channel types for consumer and
industrial products.• Describe and compare various alternatives for separating and sharing
transaction and material flow channels. • Explain the supply chain impact of a centralized warehouse structure.• Explain how and why the conditions for intermediaries in the supply chain
are changing. • Explain how manufacturing and material flow speculation and postponement
can be combined in a supply chain strategy.• Outline commonly occuring activities conducted by value-adding
distributors.• Explain the role of terminals in distribution structures.
Figure 10.1
Gaps Roles Utilities
Quantity gap Aggregation role Place utility
Distance gap Spreading role Time utility
Contact role Ownership utility
Range gap Consolidation role
Variant gap Creating variants role Form utility
Figure 10.2
Delivery of 100 units
Customer
Customer
Customer
Customer
Customer
DistributorManufacturer
Delivery of 2 units
Figure 10.3
Delivery time 2 weeks
Customer
Customer
Customer
Customer
Customer
DistributorManufacturer
Delivery time 1 day
Figure 10.4
Customer
Customer
Customer
Customer
Customer
DistributorManufacturer
Manufacturer
Manufacturer
Figure 10.5
Manufacturer Manufacturer Manufacturer Manufacturer
Wholesaler
RetailerRetailerWeb shop
CustomerCustomerCustomerCustomer
Figure 10.6
Manufacturer Manufacturer Manufacturer
RepresentativesAgent
Industrialdistributer
Customercompany
Customercompany
Customercompany
Figure 10.7
Manufacturer
Intermediary
Customercompany
Customercompany
Manufacturer
Intermediary
Customercompany
Customercompany
Transaction/Information flow
Material flow
a) b)
Stock
Figure 10.8
Manufacturer
Intermediary
Customercompany
Customercompany
Transaction/Information flow
Material flow
Manufacturer
Inter- mediary
Customercompany
Customercompany
Manufacturer
intermediary
Customercompany
Customercompany
a) b) c)
Small stockLarge stock
Figure 10.9
Manufacturer
Inter- mediary
Customercompany
Customercompany
Inter- mediary
Customercompany
Customercompany
Manufacturer Manufacturer
Material flowsin cross-docking
Material flowsin merge-in-transit
Figure 10.10
Service level
Size of stocks
100 %
Centralised distribution structure
Decentralised distribution structure
Small Large
Figure 10.11
Degree of decentralisation
Costs
Inventorycarrying costs
Storage costs
Transportation costs
Low High
Low
High
Figure 10.12
Productionstore
Centralstore
Regionalstore
Localstore
Productionstore
Distributioncentre
a) Decentralised structure b) Centralised structure
CustomersCusto-mers
Figure 10.13
Manufacturer Wholesaler Retailer Consumer
Manufacturer Wholesaler Retailer Consumer
Manufacturer Wholesaler Retailer Consumera)
b)
c)
Figure 10.14
1
2
3
4
5
Products
1 2 3 4 5 6 7 8 9
M a r k e t s
Figure 10.15
Speculation
Postponement
Speculation Postponement
Material flow
Manufacturing
Delivery of finishedproduct from down-stream distributor stock
Customer specific productmade from standard components stored at down-stream distributor
Customer specific productmade and distributed bymanufacturer (or up-stream distributor)
Delivery of finishedproduct from manufacturerstock or from up-streamdistributor stock
Figures in Chapter 11
Learning objectives
After studying this chapter, you should be able to;
• Outline the major activities of and explain the objective of a customer order process.
• Explain the principles for forecasting.• Explain when and how to conduct forecasting with
qualitative methods.• Explain and compare the characteristics of the moving
average and exponential smoothing methods.• Explain how to consider trends and seasonal variations
in forecasting.• Design and use common quantitative forecasting
methods. • Explain the principles of forecast monitoring.
Figure 11.1Kundbehov
Request
Customer order
PackingDespatching
AssemblyManufacturing
Orderpicking
Answer to request
Order confirmation
Delivery notice
Delivery
Request for quoatationProduct specification
Invoice
CustomerSupplier
Figure 11.2
Figure 11.3
M1
Bilvariant X
Enginemodule
Gearboxmodule
V1M2 V2
Car model P200
M1 V2
Four-cylinderengine
Six-cylinderengine
Manualgearbox
Automaticgearbox
Four-cylinderengine
Automaticgearbox
Customer variant of P200
M1 V2
Figure 11.4
Time
Call-off Expected call-offs Forecast
Fixedcommitment
E.g. material supplycommitment
No commitment
Time
Call-off Expected call-offs Forecast
Fixedcommitment
E.g. material supplycommitment
No commitment
Figure 11.5
Random variation Trend variation Seasonal variationRandom variation Trend variation Seasonal variation
Demand Demand Demand
Time Time Time
Figure 11.6
Annual forecast: 300 pcs
Periodic distribution - % per month
Forecast in pcs per month
5 5 7 7 8 8 11119 9 10 10
15 15 21 21 24 24 27 27 30 30 33 33
Figure 11.7
D(m) D(i)
Demand
Figures in Chapter 12
Learning objectivesAfter studying this chapter, you should be able to;
• Explain the principles for materials management.• Define push- and pull-based materials management.• Outline different types of stocks and explain their decoupling
functions in material flows. • Explain and compare the characteristics of common materials
planning methods.• Design and use common materials planning methods.• Explain and compare the characteristics of common lot sizing
methods.• Design and use common lot sizing methods.• Explain and compare the characteristics of different safety stock
methods.• Design and use common safety stock methods.• Explain the principles for stock accounting.
Figure 12.1
Chair
Legs (4) Seat (1) Back (1)
Back frame (1)
Seatframe (1)
Fabricback (1)
Fabricseat (1)
Assemblykit (1)
Figure 12.2
-Quantity in stock-Plannedinbounddelivery
-Forecasts-Reservations-Deriveddemand
DemandSupply
-Quantity in stock-Plannedinbounddelivery
-Forecasts-Reservations-Deriveddemand
DemandSupply
Figure 12.3
Stock level
Time
Inbound delivery time 1Inbound delivery time 2
Need time
Projected available in stock if inbound delivery at time 1
Projected available in stock in inbounddelivery at time 2
Figure 12.4
Item A
item B
Item C
Product P
Item A
Item B
item C
Product P
Figure 12.5
Manufacturing order
Material flow
Push:
Customer order /Manufacturing order
Material flow
Pull:
Figure 12.6
Time
Deliveryquantity
Withdrawal quantities
Stock value
Figure 12.7
Time
Stock value
Higher demand than expected Delayed delivery
Safety stock
Figure 12.8
Stock level
Re-orderpoint
Safety stock
Leadtime
Leadtime
Stock level
Re-orderpoint
Safety stock
Leadtime
Leadtime
Figure 12.9
T T
T T
Assembly
Centralstore
Localstore
Transportkanban T
1
2
3
4
Figure 12.10
Week
Planned order start 250
4 5 6 Week
Planned order start 100 100 100
4 5 6
Week
Gross requirement 400 1400 400
4 5 6
Scheduled receiptsProjected available stock 1890 1490 90 -310Planned order release 1800
Product Chair Model BItem no. 5678
Product Chair Model AItem no. 1234
Component: LegLead time: 2 weeksOrder quantity: 1800
Figure 12.11
Costs per year
Order quantity
Ordering costs
Incremental inventorycarrying costs
Total costsCosts per year
Order quantity
Ordering costs
Incremental inventorycarrying costs
Total costs
Figure 12.12
P
High volume value item
Medium volume value item
Low volume value item
95 %
97 %
99 %
Service level
P
High volume value item
Medium volume value item
Low volume value item
95 %
97 %
99 %
Service level
Figure 12.13
Stock level
Time
Leadtime for stock replenishment
A
B
C
K *
Average demandduring leadtime
D
Maximumdemandwith thepossibilityequivalent with the service level
Stock level
Time
Leadtime for stock replenishment
A
B
C
K *
Average demandduring leadtime
D
Maximumdemandwith thepossibilityequivalent with the service level
Figure 12.14
Chair
LegsSeat
(1 pcs) (4 pcs)
Delivery of 100 chairs
Withdrawal of - 100 seats- 400 legs
Figure 12.15
Store
Consumption store
Production
Figure 12.16
Mecatron, Inc. Cycle counting request 10.2.2008
Item no Description Storage place Counted no Sign.
1238647 Screw M5-12 A-04-12 …………………. ………
2465992 Screw M5-20 A-04-14 ………………….. ………
Mecatron, Inc. Cycle counting request 10.2.2008
Item no Description Storage place Counted no Sign.
1238647 Screw M5-12 A-04-12 …………………. ………
2465992 Screw M5-20 A-04-14 ………………….. ………
Figures in Chapter 13
Learning objectives
After studying this chapter, you should be able to;
• Outline common planning functions in a hierarchical manufacturing planning and control structure.
• Describe the objectives, contents and characteristics of strategic network planning, sales and operations planning, master production scheduling, order planning and production activity control.
• Explain the principles of capacity planning.• Outline and compare alternative measures for
capacity planning.
Figure 13.1
Transportcosts
Transportcosts
Inventorycosts
Inventorycosts
Production andPurchasing costs
Productioncosts
Transportcosts
Customerservice
Figure 13.2
Figure 13.3
Maximum capacity
Nominal capacity
Gross capacity Capacity notplanned to use
CapacitydropsNon plan-
Ned timeNet capacity
Figure 13.4
Capacity and capacity need
Availablecapacity
Periods
1 2 3 4 5 6
Capacity and capacity need
Availablecapacity
Periods
1 2 3 4 5 6
Figure 13.5
Figures in Chapter 14
Learning objectives
After studying this chapter, you should be able to;
• Outline and describe alternative strategies for consolidation of deliveries.
• Explain the principles and describe strategies and methods for planning regular traffic between terminals and within traffic areas.
• Design and use the savings matrix method for route planning.
• Describe how to conduct tracking and tracing in transport systems.
• Explain the principles for pricing of transportation.
Figure 14.1
Break point
Break pointT
rans
port
cor
ridor
a) Line-haul traffic between break points b) Network of break points
Pick-up area
Drop-off area
Figure 14.2
8.00
10.00
11.00
a) Milk runs through break points b) Milk runs with direct delivery
10.00
12.00
13.00
8.00
10.00
11.00
Figure 14.3
Base capacity
Extra capacity
Transport demand(capacity demand)
Time
Figure 14.4
Figure 14.5Route 1
Route 2
Route 3
Figure 14.5
Vehicle 1
Vehicle 2
Vehicle 3
Vehicle 4
8.00 10.00 12.00 14.00 16.00 18.00Working time
Figure 14.6
Jan Dec 8.00 16.00 24.00 8.00
a) Seasonal distribution of in- and outbound deliveries
Outbound deliveries
Inbound deliveries
b) Daily distribution of in- and outbound deliveries
Number Number
Outbound deliveries
Inbound deliveries
Figures in Chapter 15
Learning objectivesAfter studying this chapter, you should be able to;
• Explain the principles for procurement from a logistics perspective.• Outline the content of and explain the objective with the major
activities of a materials procurement process.• Describe and compare the procurement processes of different types
of purchased items.• Explain the role of supply contracts in the procurement process and
as part of business relationships. • Describe commonly used agreement types included in supply
contracts.• Describe principles and approaches for considering the total
financial consequences of procurement of material.• Outline criteria for supplier evaluations and compare the evaluation
processes of existing and new suppliers.• Explain how and why to separate strategic and operative
procurement activities.
Figur 15.1Material requirement
Purchase requisition
Procurement
Purchase order
Delivery monitoring
Delivery reception
RFQ/Quotation
Request response
Le
vera
ns
Order confirmation
Advance shipment notice
Material requirement
Purchase requisition
Procurement
Purchase order
Delivery monitoring
Delivery reception
RFQ/Quotation
Request response
Le
vera
ns
Order confirmation
Advance shipment notice
Follow-up and evaluation
Supplier
Invoice
Customer
Figure 15.3
Direct competition
Strategiccontract
Contracts in competition
Operative contracts
a) Number of suppliers per relationship type
Directcompetition
Strategic contract
Contracts in competition
Operative contracts
b) Total purchase value per relationship type
Figure 15.4
Purchaseprice
Inventory costs
Material handling costs
Quality costs
Reverse logistics costs
Supplier costs
Customs costs
Transportation costs
Environmental costs
Other costs
Figure 15.5
ProcurementDelivery
monitoringPurchase order Delivery reception
Follow-up andmonitoring
Managed by purchasing managers or strategic purchasing function
Managed by operational purchasing agents/materials planners, other operational personnel
Figures in Chapter 16
Learning objectives
After studying this chapter, you should be able to;
• Explain how and why negative effects occur in supply chains.
• Outline and describe the major driving forces towards increased co-operation in supply chains.
• Describe and compare the characteristics of common methods and concepts for supply chain collaboration.
• Describe and compare vertically and laterally integrated supply chains.
• Describe the characteristics of and explain how to design and combine responsive and physically efficient supply chains.
• Describe the principles of supply chain risk management.
Figure 16.1
Localstore
Localstore
Regionalstore
Centralstore
Figure 16.2
Supplier Product Regional Localmanufacturer distributor distributor
Endconsumer
Replenishmentorder
Replenishmentorder
Replenishmentorder
Figure 16.3
ProductmanufacturerSupplier
Supplier
Figure 16.4
A common inter-organisational process for cross-company material flows
Purcha-sing
Inventorycontrol
Finance Transport
Forwarding
Store Orderentry
Pick
Pack
Invoicing
Accountsreceivable
Procurementprocess Order-to-delivery
process
Transport
Forwarding
Store Orderentry
Pick
Pack
Finance
Invoicing
Accountsreceivable
Purcha-sing
Inventorycontrol
Finance
Invoicing
Accountsreceivable
Transport
Forwarding
Supplier Customer
Figure 16.5
Supplier Customer
Figure 16.6
Supplier Customer
Figure 16.7
Wholesaler Retailer
Sales information from point-of-sale via EDI
Sales paced stock replenishment
Customer
Figure 16.8
Efficientpromotion
Efficient productlaunching
Efficient productrange control
Efficient goodssupply
Figure 16.9
Account planning
Collaboration tasks Manufacturer tasks
Analysis
Demand and supply management
Execution
Strategy and planning
Retailer tasks
Market planning
Execution monitoring
Customer scorecard
POS forecasting
Replenishment planning
Exception management
Logistics/Distribution
Production and supply planningLogistics/Distribution
Store execution
Supplier scorecard
Buying/re-buying
Performance assessment
Sales forecasting
Order planning/forecastingMarket data analysis
Demand planning
Order generation
Order fulfillment
Collaboration arrangementJoint business plan
Vendor managementCategory management
Account planning
Collaboration tasks Manufacturer tasks
Analysis
Demand and supply management
Execution
Strategy and planning
Retailer tasks
Market planning
Execution monitoring
Customer scorecard
POS forecasting
Replenishment planning
Exception management
Logistics/Distribution
Production and supply planningLogistics/Distribution
Store execution
Supplier scorecard
Buying/re-buying
Performance assessment
Sales forecasting
Order planning/forecastingMarket data analysis
Demand planning
Order generation
Order fulfillment
Collaboration arrangementJoint business plan
Vendor managementCategory management
Source: APICS (2005)
Figure 16.10
Supplier Manufacturer Distributor Retailer
Endconsumer
Supplier Manufacturer Distributor Retailer
Endconsumer
b) Vertical integration – Degree to which a firm directly controls multiple links in the supply chain
a) Lateral integration – Coordinated management of separately owned links in the supply chain
Based on APICS (2005)
Figure 16.11
Functional InnovativeProduct type
Typ
eof
sup
ply
chai
n
Res
pons
ive
Ph
ysic
alef
feic
ient
Match
Match
Mismatch
Mismatch
Source: Fisher (1997)
Figure 16.12
Delivery timeLead-time gap
Material supply Production Delivery
Total lead-time
Customer orderde-coupling point
Delivery timeLead-time gap
Material supply Production Delivery
Total lead-time
Customer orderde-coupling point
Physical efficientSupply chain
ResponsiveSupply chain
Figure 16.13
Dem
and
Time
Base
Surge
a) Same product b) Different products
Surge demand
80%
% of products%
of v
olu
me
by
valu
e
LowvolumeproductsMake-to-order
High volumeproductsMake-to-stockEconomyof scale
Surge demand
80%
% of products%
of v
olu
me
by
valu
e
LowvolumeproductsMake-to-order
High volumeproductsMake-to-stockEconomyof scale
High priority
Basedemand
Figure 16.14
Supply risk
Control risk
Demand riskProcess risk
Environmental risk
Figure 16.15
Leve
lof g
ravi
dity
Risk probabilityLow High
Low
Hig
h
Low risk criticality
High risk criticality
Figure 16.16
a) Ishikawa diagram
Risk type
Cause 5
Cause n
Cause 3
Cause 4Cause 2
Cause 1
Sub-cause n
Process Y
Risk n
Risk 2
Risk 1Process X
Action taken
Responsibility & target completion date
Recommended action
RPN(1-1000)
Difficulty of detection(1-10)
Current process control detection
Probability of occurance(1-10)
Potential causes to failure
Severity if occurance (1-10)
Failure effect
Potential risk (failure mode)
Process/system/item
Process Y
Risk n
Risk 2
Risk 1Process X
Action taken
Responsibility & target completion date
Recommended action
RPN(1-1000)
Difficulty of detection(1-10)
Current process control detection
Probability of occurance(1-10)
Potential causes to failure
Severity if occurance (1-10)
Failure effect
Potential risk (failure mode)
Process/system/item
a) FMECA
RPN = Risk priority number (Severity x Occurancy x Detection)
Figures in Chapter 17
Learning objectives
After studying this chapter, you should be able to;
• Describe and compare the characteristics of various logistics and supply chain planning and executions systems.
• Describe and compare the characteristics of different information communication methods and explain how the methods can enable different types of information exchange.
• Describe and compare the characteristics of different data capture systems.
• Describe the characteristics of common electronic business strategies and explain how they can replace physical processes for communicating and doing business between purchasers and vendors.
• Define information quality and explain how information quality deficiencies may impact logistics and supply chain management.
Figure 17.1
Communication system
e-Market place
Material flow
Planning and execution system
Planning and Execution system
Identification system Identification system
Mobile unit
(eg truck)
Company A Company B
Figure 17.2
Strategic network planning
Source Make Deliver Sale
Shop floorscheduling
Materialsplanning
Demandplanning
Master planning
Productionplanning
Transportplanning
Purchasing
Collaboration Collaboration
Demandfulfillment
Distributionplanning
Source: Stadtler and Kilger (20905)
Figure 17.3
Exchange volume
Information type
Spontaneous orRoutine exchange
Exchange frequency
Aim of exchange On-line or off-line communication
Figure 17.4
Customer Supplier
Purchasing order (ORDERS)
Order response (ORDRSP)
Delivery advice (DESADV)
Invoice (INVOIC)
Delivery JIT (DELJIT)
Delivery forecast (DELFOR)
Figure 17.5
Data convertingData formatting
Batch generation Batch up-dating
Data convertingData formatting
Communi-cation
Communi-cation
EDI software
Figure 17.6
EAN13 PDF417
Figure 17.7
Reader
Reader antenna
TagTag antenna
Radio frequencycommunication
Figure 17.8
Sell-centric Solution
(Forward and Dutchauctions)
Integrated Solution
(EDI, EDA, etc.)
Buy-centric Solution
(Reverse auction)
e-Market Solution
(Vertical and Horizontalexchanges/market places)
Suppliers
Cus
tom
ers
Few Many
Fe
wM
an
y
Figure 17.9
Valid Reliable Timely CompleteEasy to understand
and use
Information quality
Figure Appendix A
0
20
40
60
80
100
120
0 10 20 30 40 50 60 70 80 90 100
Cummulative percentage of all items
Cum
mul
ativ
e pe
rcen
tage
of
tota
l vo
lum
e va
lue
C itemsB itemsA items
Figure Appendix B
Step-wise increased costs Volume Continuously increased costs Volume
Common costs Incremental costs
Step-wise increased costs Volume Continuously increased costs Volume
Common costs Incremental costs
Figure 1 Appendix C
Stock level
Time
Average stock= Q / 2
Q
Q / D
Figure 2 Appendix C
Annual cost
Order quantity
D / Q · O
Q / 2 · i · c
Total cost
Economic order quantity